The secret to higher earnings for women: marry poor

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Working women: what’s the secret to higher earnings? Marry poor. The male/female earning gap has many sources. One notable one is that some women aren’t aggressive enough. They don’t ask for raises and promotions; enter the “lean-in” mantra.

But even among high achievers, top tier MBAs like Sheryl Sandberg, not everyone wants it all—if they can afford to eschew it. Economists Marianne Bertrand and Claudia Goldin, and Lawrence Katz tracked the careers of University of Chicago MBAs from 1990 to 2000 to untangle wage disparities among potentially high earners. They hoped to understand why there are so few women CEOs and hedge fund managers. They found a significant earnings gap between men and women which grew over time.

“Dynamics of the Gender Gap for Young Professionals in the Financial and Corporate Sectors.”<br />Marianne Bertrand, Claudia Goldin, and Lawrence F. Katz

The large and growing gap is not due to timid female MBAs. Some of it is attributed to different skills, jobs before the MBA and that male business students typically take more finance classes and women more marketing classes. But a majority of the difference is due to women taking time out of the labor force and then working less after having children. Women without children usually don’t take time off and most of their earnings disparity with men can be explained by differences in their skills.

It’s notable that the earnings of some women did not fall very much after they had children and any drop in income did not persist after a few years. But these women often had a “lower” earning spouse (income under $100,000). A large and sustained drop in income is highly correlated with having children and a high-earning husband.

It’s not clear why that might be. It could be high-achieving women chose less ambitious husbands, anticipating that they’ll be more available to help with childcare. Sheryl Sandberg concedes that leaning in and having a family requires a supportive partner. Or it could be once some women had children they took less demanding jobs simply because they had the luxury of more work life balance. In light of this, advice that urges women to marry well seem all the more antiquated. If you want to have it all, best not aspire to being one half of a power-couple.